tv Press Here NBC August 16, 2015 9:00am-9:31am PDT
press here is sponsored in parking lot by barracuda network. city national bank helping northern california businesses grow. when steve jobs wanted to create the apple store, he turned to this man ron johnson. now johnson is ready for his next challenge selling you in your own home. plus, while politicians work to keep immigrants out of the u.s., silicon valley works to keep them in. a clever new way of helping visa holders stay. "fortune magazine" and the new york times this week on "press
here." good morning everyone. two of the biggest successes in retail are target and apple. apple has the best financial return per square foot of any store ever. and target? target is just cool. ♪ credited with making target cool is the guy who dreamed up the apple store. >> the first company to go through the door. ron johnson is enough of a genius to have thought up the genius r and steve jobs to turn apple into a retail giant. it earned johnson hundreds of millions of dollars. with two solid wins, target and apple, johnson was hired by jc penny to turn it around. that was a disaster.
just like every silicon valley story, disaster leads to disruption. johnson dusted himself off and started anew with a few company he calls emjoy selling gadgets and devices, delivering them to your home, and helps you learn how they work at no extra charge. bottom line is amazing ron johnson is responsible for the most successful retail store in the world, the apple store, and while at penny's he oversaw what is the worst financial quarter in retail history. thank you for being with us. so we both worked at jc pennies. i worked selling socks there in 1986 and technically you sold socks there because you sold everything. socks sales pretty good? >> pretty good, actually. explain emjoy to me. this is something my parents
would adore. they buy a new laptop. they don't know how to hook it up to the wi-fi. >> right. it's for more than your parents. we're learning that. we're in the early days. there's two ways to buy things today. you can go to the store, which we do most the time, or you can order online. when you order online it delivers to your door. there are times you want help but you want to buy online. when you buy from enjoy we'll hand deliver and then set it up and teach you how to use it. it's the same price you would pay at target or best buy. >> i don't know the same price. laptops are already -- i realize you sell more than laptops. they're on a thin margin already. how are you adding another level of service and charging the same price? >> it's simple because most products are sold through u stores, the retailer receives a gross margin cover all the fixed costs of the store rent and build out and presentation and
inventory. all we do is deliver a person. so we buy from the manufacturer at the same price the retail store does but we optimize for the experts who are employees. >> i can reverse the question and say best buy how do they have a store when the retail margins on laptops are so thin. >> that's why they're in trouble. >> good point. >> retail is hard. especially today when people are shipping increasing to buying online. and the difference between what you do and amazon you don't carry all the stuff amazon does. you can focus on the high margin stuff. >> right. amazon is a marketplace. it's like walmart in many ways. broad assortments, low price, very convenient. enjoy is more like an apple store. we hand pick products that are really important to your life, like your next smartphone, like your music system, like i want to make a movie on a go pro camera. that's what we're good at. when your purchase counts we
want you to enjoy it. >> what if you want some kind of maintenance after the fact after you have made the original purchase. is it kind of like a model where you can call the person back to help? >> absolutely. we deliver basically tech expertise. just like we have our own baby sitters and personal trainers. we think it's time for a technical expert. >> is there a model? >> for any product you already own, if you want one of the experts to come over and help you out. you want to back up things to the cloud or do more with photo, you can have an expert come and in this case it's $99 an hour. they're exceptionally well trained. they come at a certain time. >> this sounds like a familiar concept. >> yeah. what i learned at apple -- let's not kid ourselves apple makes
the easiest using products. if you go to the stores most of the people are in the back getting help. it shows people want help. they want face-to-face support in the increasingly complicated world. >> you don't carry apple products? we do. >> you carry phones that are purchased through at&t. >> correct. >> you have a contract with at&t. other apple products you can't get? >> i can't tell you about that. at this point in time we don't have apple products but all i can say is stay tuned. >> okay when you send the people, how are you finding the quality employees that you would need to represent enjoy in there are a lot of services out there. but there are some that are too technical. it is the geek and not the friendly apple type salesperson. how do you find that? >> it's a great question.
it's the number one thing we have to solve when we built enjoy. we're totally dependent on our expert. our product, in many ways -- >> you're just an website. >> right. we're delivering a person. so we started out by saying how do you design the best job for someone who works in a mobile environment. like you mentioned, everyone who works for us is an employee of enjoy. they're salaried. they have health benefits from day one. they get stock in the company. like working for uber, they set their own schedule and we match them to the customer. by creating the best job we've had a lot of applicants. we have over 10,000 people and we started three months ago. >> how many have you hired? >> we have 60 experts working here in new york and throughout the bay area, and they have exceptional people skills. they love people, and they love technology. >> and, you know, there's been a debate in the tech industry about whether these on-demand workers should be employees or contractors.
one of the things that having them be employees do you can train them. you can't train contractors. >> two things. you can train them, you can define the work, but more importantly the customer can rely on them. you can invite them back. and in a contractor world, who knows who the next contractor is going to be. we're optimizing for employees. that doesn't mean what uber does is bad. you know, what uber does it's created great jobs for people who want to supplement their income. if you want a full-time job with the freedom of the mobile economy, that's what we're designing a job for. >> how do you scale this? i think you're in two markets now new york and san francisco. with all the training that is involved and vetting the candidates -- >> that, actually, is not the big challenge. you know, we scaled apple stores throughout the world. when i left nearly 400 stores in 13 countries delivering great quality. the real challenge for us has been to develop a model of engagement with a customer that
is magic. and to be able to deliver that through people. we're learning to do that. once we get the training to do it here it will be easy to do in chicago and los angeles and miami or whenever we may go. >> it sounds pretty logistically complicated. if you have a person driving around the bay area and you need to get a product and a person at your house at the same time at a certain delivery window. >> we've had to deliver a person with a product and as soon as four hours. you can enjoy something four hours from now. >> from the -- >> so, you hit the website within four hours you can have the next smartphone. >> that's better than going to a store. >> faster than you can probably get -- >> yeah. >> in the time it takes you to get to the store and get home. if you invest with an experience with someone helping you, you would be flying your first drone. you would have made your first
movie. >> let's say i want a system and i'm going to buy one. i understand why you have an enjoy second time user. how do you get a first time user? how would i know to go to enjoy, not best buy? how do i know? how do you get the first customer? >> that's the challenge of every start up. it takes time. our goal is do more visits than uber did rides. >> wow. >> it's a pretty high order. that's what we're on pace to do. these things take time. you have word of mouth and referrals from friends, you know, we do some marketing. it's a lot of public relations, but the big secret thing for us is we're actually on the website of at&t. so when you go to order your phone from at&t, you'll see enjoy in as soon as four hours. there will be at&t relationship delivered to the customer. >> let's take a quick commercial
we live in a world where people like to shop multiple places. when you think about it you think of a store online. you can shop on our website or our partner sites. increasingly we want to be available. if we offer a product, we want to be a choice on the partner site like at&t or buy it on our site. that's the two ways we acquire customers. >> ron, most people want to ask you about apple but i want to talk about penneys. >> you were hired because you were created so awesome at apple. jc penny said do that for us. make us relevant again. you get in there and attempt to do it. one of the things you do is get rid of sales. instead of putting sweaters on sales, let's just make sweaters inexpensive. and the customers hated it. it makes me laugh because -- america wants the sales but in
order to have sales you have to raise the prices in order to lower them later. >> exactly. you must have -- >> well you know, the interesting thing our sales went down about 20%. >> which is a lot. >> which is astonishing. we planned them down 15 because the whole idea was, remember, 80% of people bought. they loved the new penneys. we want you to shop on your terms. you don't have to do the hard work. every product is fairly priced. well, the hard part, the 20% who missed it were vocal and it became pretty, you know -- if i did it over again i would thought through how we communicated our value. you know, i probably wouldn't have taken away the coupons so quickly. i would try to end in the same place. all the successful retailers today are everyday price. look at amazon, costco, h & m. >> are there things you can point to?
there was more going on behind the scenes and culture and politics that played into it. were there other miscalculation of the customer base or how they react to changes? >> the big one is pricing. the whole pricing. i thought if you told them the truth they would value that. >> what makes you think that? >> it's kind of the golden rule. that's how penney's started. >> we're all irrational. >> you got fired. >> that's not true. >> really? >> no. i resigned three types and they accepted it in april. that's the example, you know, big companies they have to do what you have to do. >> do you think you tried to accomplish what you wanted there? your strategy was the thing you thought they wanted. >> i think the strategy wasn't the issue. it was the execution. you know, we went too fast, you know, for our customer, for our employees, for the board. when you work there you work fast place. you get in the marketplace, you
pivot, you adapt. big companies are not comfortable with that. i was in a cultural that wasn't comfortable with innovation. i was a misfit in many ways. it's kind of like a square peg in a round hole. when you value innovation and speed and doing the right thing and other people are more adapted to a business model it's a tough place to be. >> you've been in retail for your whole life. when you look at, i mean, you're starting something that is kind of a hybrid between an online and offline store. do you think that's the future of retail? >> it's a part of the future. stores have been around for thousands of years. >> do you think we'll still have them? >> absolutely. absolutely. >> what about malls? >> malls are changing. >> all malls are located in the center where we live our life. look at the location of stanford shopping center, look at valley fair. it's a public place. the content changes now you go to the soul cycle class.
you tend to go to more food. >> why am i soul cycling? >> yeah. >> if you could just for fun you would itch to go in and change? an airline or something? >> i think everything i do -- because i'm -- i spend a lot of time thinking about customers. everything i think about, you know. >> every time you go to board you wonder why? i can't stand it when they have a recorded, you know. the personal touch is missing in the world. technology should enable that. most people use technology to reduce costs. if you technology in the right way it improves the outcome. >> ron johnson is the head of enjoy and the website is not quite enjoy. >> goenjoy.com. >> go enjoy ron johnson's latest
world, make you rich, and employ lots of americans. here is the thing, if you quit google to concentrate on the wonder project you'll be told to leave the country because it was your job at google that kept your visa current. pack. you'll be told, and take your amazing idea with you. that makes absolutely no sense. an immigrant and visa holder himself he created unshackled. it is full of young start ups created by immigrant visa holders. here is the trick they work for unshack unshackled in exchange for a piece. they sponsor their visa, pay health insurance, and pay them. he's been able to raise $3 .5 including steve job's wife. thank you for being with us. you are essentially sort of an umbrella company for all kinds of immigrant companies? >> not an umbrella company. think of it as a tech lab or
research lab where entrepreneurs come in to build their products. they get to a point where it's ready for venture funding. so the example you take you're working at google or facebook and your day job is build a product and do product management but now you want to build the next best thing. to do it you need time. we give you the time by making you an employee. you're still the founder of your idea, but you are an unshackled employee and your job is to innovate. >> every once awhile somebody comes up with a clever idea and the government says no. it doesn't -- it's not a loopho loophole, exactly, but it kind of loopholish. >> it's policies of framework, right. we all operate. every business, every person operates within the framework of the policy and so do we. being a company hiring people whether they're citizens or permanent residents or on a visa authorized to work in the u.s. is within the purview of the
policy. that's what we do. the people come with their ideas, they have the goal to do something bigger than carry out somebody's instructions. that's the environment we have created. >> who ones twns the idea and w pays the salary? >> it's usually a team of two or more. it's usual lay combination of immigrants and citizens. that's the other part, as you mentioned -- >> right. >> exactly. eight out of nine deals we are in is a combination. >> you get a cut? >> we take equity for the capital that we invest in that research and the idea is owned by a company that is set up separately in which the founders are the shareholders. it looks no different than any other age-old funded company. except the company is not capable of hiring employees on visas. so we perform the research function for that company until the product progresses to a
point -- >> what is the end game there? when do they break out of --? >> they can hire themselves. >> exactly. once the companies capitalize, it's capable of hiring employees that are on visas. >> how does that change -- how does getting more funding change my visa problem? >> you can get a visa. they have a certain minimum you have to raise. >> yeah. the way the policy works an employer to be able to hire employees who are on visas have to meet certain criteria. one is the company should be capitalized. >> but i'm the head of the company and i'm on a visa. can i hire yourself? >> you structure in a way you are an employee, as i am, for example, as any of our founders will be. they will be employees of the company and they could be fired by the board of directors if they're not performing their job. and hence the employer employee relationship. the big capability issue comes in the funding criteria, which is if you have $200,000 of
money, cif looks at it's not enough to hire you for three years. >> so everything else they do like raising money everything stays the same. there's no difference from other start-ups. >> it stays the same. and that's another thing that is important when you look at teams with immigrant founders because they didn't grow up here. they don't have the networks as citizens usually would. and so a part of our strategy was to surround them with people who will make it easy for them to secure that capital as the product is ready, and hence when you look at the invest network those who have investors in unshackled they are folks that look funding them. >> do you have a sense how many people we're losing because the visa issue? how many potential immigrant founders? is there any way to quantity fie it? >> the qua to quantify we hear success stories. nobody writes about the nonsuccess stories for people
still waiting for their green cards. >> or went back -- >> that's a great example. there are numerous examples of entrepreneurs who waited until they got their green card. they quit the job and started the company. i worked for one such entrepreneur. it's tough to get numbers. but the interesting numbers are there are 7 billion people outside the u.s. of which 1.3 million have been able to come here as students or highly skilled workers. >> and we've documented this over and over. >> that's right. >> but the frustrating number of people who are at stanford, they have the visa, they create a company, and start employing americans and we tell them to go away. >> that's right. ha some have been on the show. that's where the challenge of how do we keep -- how do we retain the best who we as a country invested in? keep them here, enable them to build companies, build wealth and jobs here?
>> you have nine, you said, companies now? >> that's right. >> how do you choose which ones? what is your strategy? >> the big overlaying thing is the team. 80% of the -- we look at what market they operate in and what the attraction is if there needs to be a traction. >> like an incubator? >> it's a fun. we look at as fun. our selection process is kind of a mix up of fun and google's recruiting process. that hybrid gives us focus on the team, first. they are engaged in the process. so we get to leverage their expertise of investors and help teams through the journey get to the next -- >> and your fund is not very big. i realize this is silicon valley. it's in the millions but not small. you don't need a ton of money but you're offering the visa
help. >> that's right. >> exactly. we invest about $200,000 per company or put aside that much money. if they don't use all that capital, but the way we look at is like any start up. how many companies do we need to prove this concept? what does that mean? how much do we need to raise? we set out to raise half million and we ended up raising 30% more. it tells us if we need more capital, it won't be a problem for us. >> it's easy only in silicon would we have a conversation about a few million is not very much money. thank you for being here.
lle." i'm damian trujillo and today, the honors of the san jose musicians memorial, plus the legendary artist carlos perez right here in our studio. this is your "communidad del valle." male announcer: nbc bay area presents "communidad del valle" with damian trujillo. damian: we begin today with the magic of coding and getting more latinos and latinas into coding. with me here on "communidad del valle" is nancy urena reid on the show. and you're a teacher of mathematics and computer science at lincoln high school in san jose. nancy urena reid: that's correct. damian: now, when we talk about coding, we've--it's a relatively new term or is it not? what do we talk about when we talk about coding? i know it involves kids and--not necessarily kids, but people on computers. nancy: yeah, so coding gives students the opportunity to create something using a language such as, like java, or